Chinese investors of Ukraine’s Motor Sich have increased the amount of arbitration lawsuit against Ukraine by $100 million, taking the total figure to $3.6 billion.
"The increase in the amount of preliminary claims is due to the fact that the initial group of plaintiffs was expanded to include several other Chinese shareholders, who also suffered significant losses as a result of Ukraine's actions in violation of its international obligations," Motor Sich said in a statement.
The investment dispute shall be considered by an ad hoc arbitral tribunal, which the parties are now in the process of forming.
Vyacheslav Boguslaev, the owner of Motor Sich, sold the company to Chinese investors in 2016. The acquisition was blocked by the Ukrainian government, forcing Chinese partner to seek billions of dollars in damages.
In July 2017, the Ukrainian Security Service (SBU) opened criminal investigation into subversive activity, and on April 2018 the company shares were seized at the request of the SBU investigator in order to preserve the physical evidence.
Ukrainian state-owned defense conglomerate UkrOboronProm confirmed the sale of more than 50% of Motor Sich’s shares to the Chinese in December 2019. The deal will reportedly involve a package of shares worth around $250 million, the amount that China will “invest” in the factory over the next two years.
Russia and the U.S. have previously laid claim to the Ukrainian company now acquired by Beijing.
Last month, the U.S. blacklisted China’s Skyrizon company, which was trying to acquire Motor Sich. In the same month, Ukraine imposed sanctions on Skyrizon Aircraft Holdings Limited (British Virgin Islands), Hong Kong Skyrizon Holdings Limited (Hong Kong), Beijing Skyrizon Aviation Industry Investment Co., Ltd (China), Beijing Xinwei Technology Group Co., Ltd (China), and Chinese tycoon Wang Jing.
Restrictions imposed by this resolution include asset freezes, restrictions on trading operations, a ban on the transit of resources and flights, a ban on funds withdrawals from Ukraine, a ban on transactions with securities of these companies, a ban on increasing the share capital of the companies they own in Ukraine, cancellation of visas and cancellation of visits.